Lawsuit charges Integrus Realty, Desak Development with widespread mismanagement of affordable properties

Firms’ owner, Mark DeAngelis, is accused of neglecting properties after making millions from them

Chicago /
Oct.October 24, 2018 09:00 AM

L. Mark DeAngelis and 7250 S South Shore Drive (Credit: Twitter and Apartments)

Desak Development and Integrus Realty Group are being sued in federal court, accused of collecting millions in fees to manage 81 affordable housing buildings then allowing them to fall into neglect.

The suit claims the firms and their owner, L. Mark DeAngelis, negotiated deals for a nonprofit to buy the properties at inflated prices to boost his fees, according to the Chicago Tribune. The properties were then mismanaged to the point where they racked up numerous building code violations.

DeAngelis called the claims baseless. He previously said he and his firms acted property in all aspects of the transactions and property management.

The buildings now have 17 active violations, and the suit filed Monday in federal court in Chicago predicts “numerous” others are to come.

A Tribune investigation found DeAngelis teamed with Ohio lawyer Meredith Rosenbeck to start a nonprofit called the Better Housing Foundation that began buying buildings in 2016, using bonds issued by the state. The group was able to borrow tens of millions of dollars at reduced interest rates, and the state waived hundreds of thousands of dollars in property taxes.

The properties later failed so many inspections the Chicago Housing Authority banned its aid recipients from moving into most units.

The Better Housing Foundation fired Integrus Realty Group as property manager in the spring, the state revoked the nonprofit’s property tax breaks and the foundation later was absorbed by a larger nonprofit, Invest in America’s Veterans Foundation. [Chicago Tribune] — John O’Brien

 

Related Articles

arrow_forward_ios
500 N. Michigan Avenue (Google Maps)
Owner shops Mag Mile office tower for residential uses
Owner shops Mag Mile office tower for residential uses
151 N. Michigan Avenue, Chicago (Loopnet, Illustration by Kevin Cifuentes for The Real Deal)
Developer plans 3-story building in lieu of tower at long-vacant Millenium Park
Developer plans 3-story building in lieu of tower at long-vacant Millenium Park
Citadel's Ken Griffin (Getty, iStock)
Griffin’s Citadel debates Chicago exit due to crime
Griffin’s Citadel debates Chicago exit due to crime
Preservation Chicago's Ward Miller and Century Building (Tdl1060/ CC BY-SA 4.0 via Wikimedia Commons, LinkedIn)
Preservationists push to save Chicago’s Century, Consumers towers
Preservationists push to save Chicago’s Century, Consumers towers
A photo illustration of 105 West Adams Street (top right) and the Chatham Village Square shopping center (bottom) (LoopNet, iStock/Photo Illustration by Steven Dilakian for The Real Deal)
Chicago landlord Tadros files for bankruptcy with $22M mortgage at stake
Chicago landlord Tadros files for bankruptcy with $22M mortgage at stake
From left: 33 Realty's Sean Connelly, Essex's Brian Karmowski and Interra Realty's Brad Feldman (iStock, 33 Realty, Essex, Interra Realty)
Surging rates cripple Chicago multifamily deals
Surging rates cripple Chicago multifamily deals
Baxter CEO ​José (Joe) E. Almeida and 1 Baxter Parkway, Deerfield, IL (Google Maps, Baxter)
Medical products company lists 101-acre suburban Chicago office campus
Medical products company lists 101-acre suburban Chicago office campus
5200 West Roosevelt Road in Chicago, Clear Height Properties CEO Dominic Sergi and 130 East Street Charles Road in Carol Stream (Google Maps, Clear Height)
Amazon pullback, rising rates fail to cool Chicago industrial market
Amazon pullback, rising rates fail to cool Chicago industrial market
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...